††††† NECESSITY, FUNCTION, AND CONFORMITY: KRS
156.070 requires the Kentucky Board of Education to have management and control
of the common schools and their programs. KRS 156.160 requires the Kentucky
Board of Education to promulgate administrative regulations establishing
standards that school districts shall meet in operational performance,
including construction of public school buildings and the use of uniform forms.
KRS 162.060 requires that the chief state school officer shall examine or cause
to be examined all plans and specifications for public school buildings in
accordance with administrative regulations promulgated by the Kentucky Board of
Education. KRS 162.065 requires the Kentucky Board of Education to prescribe
administrative regulations governing construction managers. KRS 322.360 and
323.033 require a school district, when engaged in the construction of any
public work involving architecture or engineering, to utilize an architect or
engineer to directly supervise the preparation of plans and specifications,
estimates, and the execution of construction. This administrative regulation
establishes the procedures and criteria for the construction of public school
buildings.

††††† (4) "Construction documents"
means the written and graphic documents prepared or assembled for communicating
the project design for construction and for administering the construction
contract, consisting of bidding requirements, contract forms, contract
conditions, contract modifications, addenda, specifications, and drawings.

††††† (5) "Construction manager" or
"CM" means a qualified and experienced contracting organization which
provides the services of construction management and possesses a general trades
workforce, staff and equipment, financial base, insurance coverage, bonding capability,
a minimum of three (3) years of construction management experience on projects
of $2,000,000 or more, and the ability to provide the services required.

††††† (6) "Contractor" means an
individual, corporation, estate, trust, partnership, limited liability company,
association, joint venture, or any other legal entity performing construction
and having a contract with a board.

††††† (7) "Design professional"
means a person licensed in the Commonwealth of Kentucky under KRS Chapter 322,
323, or 323A, which includes architects, engineers, and landscape architects
providing services within their respective practice areas.

††††† (8) "Emergency" means a
situation which creates a threat or impending threat to public health, welfare,
or safety that may arise by reason of fires, floods, tornadoes, other natural
or man-caused disasters, epidemics, riots, enemy attack, sabotage, theft,
explosion, power failure, energy shortages, transportation emergencies,
equipment failures, state or federal legislative mandates, or similar
unforeseen events, and which results in the loss of use of the physical
facilities.

††††† (9) "Fixed equipment" means
furnishings or equipment that are secured to the wall, floor, or ceiling to
operate or function in the manner intended by the product manufacturer, such as
bleachers, student lockers, casework with sinks, or plumbing fixtures.

††††† (12) "Major renovation" means
a project at a permanent center including three (3) or more building systems
and an estimated cost of twenty (20) percent of the current replacement cost of
the building, or portion thereof, and the building or building systems shall be
a minimum of thirty (30) years old or thirty (30) years shall have passed since
its last major renovation with the exception of:

††††† (a) The restructuring of an open space
school for conventional classrooms; or

††††† (b) The replacement of one (1) of the
following single building systems that is within fifteen (15) years of its
original installation, or if required by a change in regulation or code:

††††† 1. Heating, ventilation, and air
conditioning systems and controls;

††††† 2. Systems to provide full use of a facility
by the physically handicapped and to bring a facility into compliance with
state and federal law;

††††† 3. Life safety and security systems; or

††††† 4. Roofing systems, flashings, and
accessories.

††††† (13) "Minor project" means a
project for expansion of a permanent center to include a maximum of four (4)
classrooms, campus enlargement, renovation of buildings and building systems
with a budget of less than $25,000, or construction of support space at
permanent centers, or renovation not defined as major renovation.

††††† (14) "Owner" means the local
board of education or financing corporation established for the purpose of
financing school construction.

††††† (15) "Qualified provider" is
defined by KRS 45A.345(29).

††††† (16) "Record documents" means
a set of reproducible drawings or electronic digital files revised to indicate
significant changes in the work during construction, including addenda, change
orders, and construction change directives.

††††† (17) "Superintendent" means
the superintendent of the local school district or an authorized designee of the
superintendent selected to represent the board regarding construction issues.

††††† Section 2. Construction Project
Application. (1) The board shall submit an application on the BG-1 Project
Application Form (BG-1 Form), to the department for approval of a proposed
construction project.

††††† (2) An application shall be submitted
for each project that is:

††††† (a) Funded by Support Education
Excellence in Kentucky (SEEK) capital outlay funds, Facility Support Program of
Kentucky (FSPK) funds as provided by KRS 157.620, School Facilities
Construction Commission (SFCC) funds, or building funds as provided by KRS
160.476;

††††† (b) Proposing construction of a new
building, addition, or alteration of an existing building that requires design
by a design professional for a building or building system;

††††† (c) Proposing a guaranteed energy
savings contract;

††††† (d) Proposing a minor project; or

††††† (e) Proposing a major renovation.

††††† (3)(a) If SFCC funds are included in
the financing plan, projects shall be selected in prioritized order from the
District Facility Plan created pursuant to 702 KAR 4:180.

††††† (b) If restricted funds other than SFCC
are included in the financing plan, the board may select any project in any
priority used to determine district need.

††††† (c) Projects not used to determine
district need shall only be funded as defined by the General Assembly.

††††† (4) The BG-1 Form shall be approved by
the board.

††††† (5) The department shall take action on
the BG-1 Form within thirty (30) calendar days of receipt.

††††† (6) If an emergency occurs, impacting
an activity for which a BG-1 Form is required:

††††† (a) The superintendent shall:

††††† 1. Proceed with corrective actions, as
needed;

††††† 2. Notify the department of the
emergency and request approval to continue with the plans and corrective
action;

††††† 3. Advise the board to declare an
emergency in accordance with the districtís officially adopted procurement
method under KRS 424.260 or 45A.380; and

††††† 4. Submit to the department:

††††† a. BG-1 Form; and

††††† b. The board order declaring the emergency;
and

††††† (b) The department shall process the
emergency BG-1 Form request within seven (7) calendar days of receipt.

††††† Section 3. Local Board Oversight
Responsibilities. (1) Site acquisition for new sites shall be conducted in
compliance with 702 KAR 4:050.

††††† (2) An easement, property lease,
property lease purchase or property lease with an option to purchase by a board
for fixed equipment, capital construction, or an alteration to an existing
building or building system shall require the submittal of plans and
specifications and lease documents to the department for review and approval
based on compliance with the requirements in 702 KAR 4:090.

††††† (3) Construction files and records
shall be maintained by the superintendent, organized by project, and accessible
for review. Construction files and records shall include:

††††† (a) Board orders;

††††† (b) Proposals (bids);

††††† (c) Contracts, construction documents,
and record documents;

††††† (d) Copy of each certificate of
required liability insurance for the design professional, the design
professionalís consultants, and CM or qualified provider of GESC services, if
used;

††††† (e) Correspondence; and

††††† (f) Financial documents.

††††† (4) The board shall provide oversight
of the design professional services as established in this subsection.

††††† (8) During the design phases of a new
school building project, areas shall comply with the model program of spaces
established in 702 KAR 4:180.

††††† (9) If the design professional for general
contractor delivery projects or the design professional and CM for CM delivery
projects determine additional funding is justified or a reduction of physical
scope of the project is needed and the board concurs, the board shall forward a
revised board-approved BG-1 Form to the department for approval.

††††† (10) During the bidding phase of the
construction project, the board shall:

††††† (b) Prior to advertising, receive
written approval from the department of the construction documents;

††††† (c) Hold possession of the construction
documents;

††††† (d) Approve and submit each successful
bidderís documents to the department for review and approval of each proposed
contract and the financial plan;

††††† (e) Submit a revised board-approved
BG-1 Form for funding changes after bidding; and

††††† (f) Have in its possession prior to
signing the construction contract:

††††† 1. Unsigned contractor's performance
and payment bond;

††††† 2. Certificates of required insurance;

††††† 3. Property insurance policy including
insurance written on a builder's risk "all-risk" or equivalent policy
in the amount of the initial total construction cost, plus the value of
subsequent contract modifications and the cost of materials supplied and
installed by others, comprising total value for the entire project at the site
on a replacement cost basis without optional deductibles;

††††† 4. The departmentís written approval to
sign each owner contractor agreement; and

††††† 5. Bids accepted for the bond sale.

††††† (11) The board shall provide oversight
of construction administration and construction contract closeout and submit a
revised board-approved BG-1 Form if construction contingency is exceeded.

††††† (12) If a lien is filed with a court
and the board is given notice of the lien, the board shall:

††††† (a) Notify the board attorney;

††††† (b) Notify the department; and

††††† (c) Proceed in accordance with the
contract.

††††† Section 4. Architectural Services. (1)
The board shall advertise for architectural services utilizing the KDE Request
for Proposals for Architectural/Engineering Services or shall evaluate and
select a minimum of three (3) architectural firms who have submitted a letter
of interest. Advertisement and evaluation of three (3) firms shall not be required
if:

††††† (a) The total construction cost of the
project is estimated at less than $1,000,000; or

††††† (b) The project is the continuation of
phased construction at the same site.

††††† (2) The board and design professional
shall negotiate a contract for services required, using either:

††††† (3) A letter of agreement stating
services, terms, and conditions that have been approved by the board shall be
acceptable in lieu of AIA Document B101-2007, Standard Form of Agreement
Between Owner and Architect - KDE Version for a project with an estimated
construction cost of less than $50,000.

††††† (4) The design professional shall:

††††† (a) Provide professional liability
insurance;

††††† (b) Complete a KDE Non-Collusion Affidavit;

††††† (c) Provide construction documents and
cost estimates, as required by the contract;

††††† (d) If requesting reimbursements or
additional service fees, provide a detailed listing of each charge on the
payment request; and

††††† (e) Request payment of the construction
phase fee at the same proportionate percentage as the construction's
completion.

††††† (5) The department shall review and
approve the board-approved design professionalís contract based on the
following criteria:

††††† (b) Required certificates of liability
insurance as stated in the AIA Document B101-2007, Standard Form of Agreement
Between Owner and Architect - KDE Version or the AIA Document B132-2009, Standard
Form of Agreement Between Owner and Architect, Construction Manager as Adviser
Edition - KDE Version;

††††† (c) Compliance with applicable laws for
modifications to the contract; and

††††† (d) Consistency with the scope of work
and anticipated cost approved on the BG-1 Form.

††††† (6) The design professional shall
prepare and provide documents and services required by contract, laws, and AIA
documents incorporated by reference in this administrative regulation. The
department shall request clarification, as needed, on documentation which does
not comply.

††††† Section 5. Construction Management
Services. (1) A CM shall not be employed on a project estimated at less than
$2,000,000 for construction cost. The department may approve exceptions if the:

††††† (a) Project is a phase of a phased
project and the CM is to be employed on all subsequent phases; or

††††† (b) Project's complexity or fiscal
soundness requires it.

††††† (2) The board shall advertise for CM
services utilizing the KDE Request for Proposals for Construction Management
Services or shall evaluate and select a minimum of three (3) CM firms who have
submitted a letter of interest.

††††† (3) The board and CM shall negotiate a
contract for services required using AIA Document C132-2009, Standard Form of
Agreement Between Owner and Construction Manager as Adviser - KDE Version.

††††† (4) The CM shall:

††††† (a) Prior to the board signing the
construction contracts, provide a 100 percent performance and payment bond, AIA
Document A312-2010, Performance Bond and Payment Bond - KDE Version, in the
amount of the CM fee and in compliance with KRS 45A.435;

††††† (b) Provide professional liability
insurance;

††††† (c) Provide construction cost estimates
in conjunction with the design professionalís design at the end of each phase
for schematic design documents, design development documents, and construction documents;

††††† (d) Complete a KDE Non-Collusion
Affidavit;

††††† (e) Request approval by the owner's
representative for reimbursement or an additional service fee prior to the
service being rendered or expenditure being made;

††††† (f) If requesting reimbursement or an
additional service fee, provide a detailed listing of each charge on the
payment request; and

††††† (g) Request payment of the construction
phase fee at the same proportionate percentage as the construction's
completion.

††††† (5) The department shall review and
approve the board-approved CM contract based on the following criteria:

††††† (d) Compliance with applicable laws for
modifications to the contract; and

††††† (e) Consistency with the scope of work
and anticipated cost approved on the BG-1 Form.

††††† (6) The CM shall provide all documents
and services required by contract, laws, and AIA documents incorporated by
reference in this administrative regulation. The department shall request
clarification, as needed, on documentation which does not comply.

††††† Section 6. Project Documents for
General Construction and Construction Management. (1) After the department has
issued written approval of the BG-1 Form, the department shall notify the board
of required submissions for the project.

††††† (a) The design professional shall
prepare schematic design documents of the proposed construction from written
educational program specifications which are in compliance with 702 KAR 4:170
and 702 KAR 4:180.

††††† (b) The board shall submit the
board-approved schematic design documents and a copy of the educational program
specifications to the department for review and approval.

††††† 1. The schematic design documents and a
copy of the educational program specifications, approved by board order;

††††† 2. The site plan demonstrating
compliance with 702 KAR 4:170;

††††† 3. Proposed floor elevation which is a
minimum of one (1) foot above the 100-year flood plain elevation for new
construction and the proposal of no state funds for renovation below the
100-year flood plain elevation;

††††† 4. Floor plans demonstrating:

††††† a. The number, type, and size of the
planned spaces, including support spaces;

††††† (i) An elementary school limited to 115
percent of the total gross area of the model program of spaces; or

††††† (ii) A middle or high school limited to
120 percent of the total gross area of the model program of spaces; and

††††† d. Building efficiency (the percent of
net program area to gross building area) meeting or exceeding the guidelines of
702 KAR 4:180;

††††† 5. Functional aspects demonstrating:

††††† a. The distribution of functions;

††††† b. Program space educational
suitability; and

††††† c. The appropriateness for the needs of
the facility; and

††††† 6. The budget documenting the estimated
construction cost (gross building area multiplied by the cost per square foot,
plus site development costs) in relation to the BG-1 Form total construction cost.
If the estimated construction cost exceeds the BG-1 Form total construction cost,
the board shall approve either an increase in the budget or a decrease in the
physical scope of the project.

††††† (2) After receiving the departmentís
written approval of the schematic design documents, the design professional shall
prepare the design development documents.

††††† (a) The board shall submit to the
department for review and approval:

††††† (b) The board shall submit to the
department a copy of the signed letter of transmittal sent to the Kentucky
Transportation Cabinet or other agency having jurisdiction regarding proposed
entrance and right-of-way improvements.

††††† 1. Site plan (proper siting of the
building with respect to vehicular and pedestrian circulation, separation of
bus loading area, student play areas, athletic fields, utility construction,
and site drainage, with details appropriately developed);

††††† 4. Budget (the total project cost on
the BG-3 Form is within the approved BG-1 Form total project cost budget; if
the BG-3 Form total project cost exceeds the BG-1 Form total project cost, the
board shall approve an increase in the budget or a decrease in the physical
scope of the project); and

††††† 5. BG-2 Form (properly completed and
conforms to the educational program specifications).

††††† (3) After receiving the departmentís written
approval of design development documents, the design professional, and the CM if
utilized, shall prepare the completed construction documents for bidding.

††††† (a) The board shall submit to the
department:

††††† 1. Board-approved completed drawings
and project manual; and

††††† 2. Proof of submission of completed construction
documents to other agencies having jurisdiction.

††††† (7) The department shall review and
approve the project based on compliance with KRS 45A.352(9) and (10).

††††† (8) After written approval of the
project is received from the department, the qualified provider shall
incorporate review comments and prepare the project scope documents. The board
shall submit to the department for review and approval:

††††† (a) Board-approved project scope
documents;

††††† (b) BG-2 Form; and

††††† (c) Proposed contract.

††††† (9) After written approval of the
project scope is received from the department, the qualified provider shall
incorporate review comments and complete the project documents, including
drawings and specifications. The board shall submit to the department:

††††† (a) Board-approved project documents,
including final drawings and specifications;

††††† (c) Confirmation that the proposed
contract complies with KRS 45A.352(3); and

††††† (d) Revised BG-1 Form to conform to the
proposed contract and financing.

††††† (10) The department shall review and
provide written approval of the proposed GESC based on:

††††† (a) Financing documentation; and

††††† (b) KRS 45A.352(9) and (10).

††††† Section 8. Construction Bids,
Contracts, and Bond Sales. (1) Negotiation of the bid price shall not be
allowed, except in accordance with KRS 45A.375 for those districts under the
Model Procurement Code.

††††† (2) The board shall submit to the
department for review and approval:

††††† (c) The revised financial page of the
BG-1 Form to coincide with the proposed project costs;

††††† (d) Preliminary official statement;

††††† (e) Notice of revenue bond sale;

††††† (f) Official terms and conditions; and

††††† (g) Plans of financing.

††††† (3) The board shall submit to the
department for review and approval the following documentation for projects
that are bid:

††††† (a) Each bid tabulation;

††††† (b) Bid security;

††††† (c) KDE Form of Proposal for each
successful bidder;

††††† (d) Written recommendation of the
design professional and CM, if utilized, regarding the awarding of the
contract; and

††††† (e) Written rationale for the
additional cost if the accepted bid exceeds the BG-3 Form by ten (10) percent
or more.

††††† (4) If a bond sale is pending, the
documents required by subsections (2) and (3) of this section shall be
submitted to the department a minimum of ten (10) working days prior to the
scheduled bond sale date.

††††† (5)(a) Discrepancies between the
proposed contract and bidding documents shall be remedied prior to approval.

††††† (b) Approval of the proposed contract
by the department shall not indicate the contract is the best or the most
reasonable.

††††† (6) If the submitted documents are not
in an approvable form at least five (5) working days before the scheduled bond
sale, the sale date shall be postponed.

††††† (7) The board shall contract with a
fiscal agent to assist in meeting all reporting, filing, and selling
requirements for securing the financial approval of the department if school
revenue bonds are proposed for sale.

††††† (8) The department shall issue the
written approval for the financing plan, authorize the bond sale, and issue the
approval letter for the chief state school officer or a designee.

††††† (9) The board shall submit to the
department:

††††† (a) A copy of each signed contract and
purchase order;

††††† (b) Each contractorís insurance
certificate required by law and by contract to hold the board safe from loss
until the project is completed or until an occupancy permit is received by the
board; and

††††† (c) A copy of each 100 percent
performance and payment bond in compliance with KRS 45A.435.

††††† (2) Board-approved change orders under
$25,000 per change event and within the construction contingency amount shall
be submitted to the department.

††††† (3) Board-approved change orders which
equal or exceed $25,000 per change event and within the construction
contingency amount shall be submitted, prior to execution, to the department
for review and approval.

††††† (4) The department may approve a change
order only if the change order amount is less than the available construction
contingency amount on the BG-1 Form and is in accordance with subsections (1)
and (3) of this section.

††††† (2) The investment earnings resulting
from an agreement entered by a board involving the construction account,
including the construction contract retainage for an approved project, shall be
invested in a manner so that additional income from the investment shall accrue
only to the construction account.

††††† (b) A reconciliation of the summary of
all purchase orders, if utilized, including change orders, for each contract.

††††† (2) If the board agrees the
construction contract is complete and all accounts are reconciled, it shall
approve the BG-4 Form and forward it to the department for review and approval.

††††† (3) When all construction contracts are
complete, if the board agrees the project is complete, it shall approve the BG-5
Project Closeout Form, 2013 (BG-5 Form) and forward it to the department for
review and approval.

††††† Section 13. Penalties for Malfeasance
or Nonfeasance. (1) A determination by the board or the department of
malfeasance or nonfeasance shall be forwarded to the chief state school
officer.

††††† (2) The chief state school officer may
make a recommendation to the KBE to determine that the offending firm is
ineligible to provide professional services on school construction projects for
a period not to exceed five (5) years.

††††† (3) The KBE may affirm, modify, or
reverse the chief state school officerís recommendation.

††††† (4) If the principals of the offending
firm become associated with another firm during the penalty period, upon
recommendation by the chief state school officer, the KBE may determine that
the penalty invoked shall also apply to that firm.

††††† Section 14. Incorporation By Reference.
(1) The following material is incorporated by reference: